The financial entrepreneur at the center of a multi-million-dollar bankruptcy case filed this week heads a web of companies facing allegations of fraud and bearing deep ties throughout the Middle Tennessee banking community.

Ed Lowery is chairman of Citizens Corp., which filed for Chapter 11 protection on Monday.

But that’s not the only challenge for Lowery, who either owns or has significant ties to companies and individuals that are involved in at least seven civil lawsuits with total claims of more than $5.5 million in Middle Tennessee. In one suit, Lowery and his various entities face allegations of fraud and shuffling assets to stay afloat. The financial claims in the lawsuits are in addition to more than $17 million Lowery’s Citizens Corp. owes, according to bankruptcy documents.

Some other entities connected to Lowery are also wrapped up in disputes and negotiations tied to struggling lender Tennessee Commerce Bank and other institutions.

So far, at least four banks — including two Lowery previously had ownership in, Peoples State Bank of Commerce of Nolensville and Farmers Bank of Lynchburg — have filed suits related to his dealings. A dispute with Tennessee Commerce Bank, meanwhile, figures prominently in Chapter 11 proceedings.

The network

In one key lawsuit, Tennessee Bank & Trust, a local division of an Arkansas lender, alleges that Lowery, family members and various companies it calls his “alter egos” improperly released a piece of real estate from a loan it had participated in. The suit alleges breach of contract, civil conspiracy and fraud, according to court documents.

The plaintiffs allege that Lowery and related entities began to “self-deal” and “shuffle assets” in 2010 in order to minimize financial risk for himself.

The lawsuits describe a network of at least nine companies in which Lowery previously had or still has an ownership stake or authority. Tennessee Bank & Trust describes the relationship as Lowery having “dominion” over companies that through his direction or that of associates have been instruments of fraud, according to court documents.

In a joint interview, Lowery and his attorney, Bob Mendes, a prominent bankruptcy attorney with MGLaw of Nashville, denied allegations of wrongdoing and attributed his woes to the economy.

“I spent a lot of my career on the banking side, especially coming into a troubled bank and fixing it,” Lowery said. “It is the sluggish economy, and it is very difficult.”

Lowery tied a large portion of his troubles to the 2009 purchase of the Oakland Deposit Bank in West Tennessee, which he recapitalized but said was difficult to turn around. The combination of taking on debt to finance the Oakland Deposit deal, along with worsening economic conditions overall, dealt a blow to his companies, he said.

Allegations aside, various sources familiar with Lowery’s dealings — who requested anonymity describing sensitive legal and financial issues — describe Lowery as the central player linking the companies, often with considerable control over them.

Mendes said there are “legitimate differences” between Lowery’s entities and that all of them “adhere to proper corporate formalities.”

“It’s appropriate for an owner, whether directly or indirectly, to have a role in managing the businesses in which he’s involved,” Mendes said.

Lowery said Citizen’s Corp. is the holding company for his non-bank entities, and that two other companies held Peoples and Farmers. Both of those banks are now under the control of Tennessee Commerce, which took them as collateral on debt that Lowery said included financing for the Oakland purchase.

Lowery’s companies are privately held, leaving little financial data available at this point aside from the regulatory reports for Peoples and Farmers, in which he no longer has ownership.

Lowery acknowledged problems with BBC Holdings, a company that was created to purchase troubled loans from banks in an effort to sell them later for a profit.

Frank Reeves, an attorney with Hix & Gray of Nashville who represents creditors in bankruptcy cases but was unfamiliar with BBC specifically, said such companies can “reap substantial returns” if they succeed in buying low and selling high. But a slow economy can leave nothing of value.

“Sometimes they buy garbage, and it stays garbage,” Reeves said.

Lowery said he’s used the BBC model in the past and was “very successful.”

The ripple

The impact of the situation, meanwhile, is still working its way through the local financial community.

Citizen’s Corp. lists nearly $17.3 million in liabilities to Tennessee Commerce. A dispute over the debt is a major issue for the bank — one of Middle Tennessee’s largest locally based lenders — as it searches for investors and deals with regulators after its publicly traded parent announced a $120 million loss in the third quarter.

Mendes said the bank has stopped negotiating, forcing Citizen’s Corp. to seek Chapter 11 protection. Under Chapter 11, companies can reorganize, search for investors and make other moves rather than liquidate.

Tennessee Commerce declined to comment on a client, but management previously described the taking of the two community banks as an innovative way to resolve a difficult situation.

Beyond the situation with Tennessee Commerce, BBC Holdings also has surfaced in a failed bid by TriStar Bank of Dickson to acquire Heritage Bank & Trust of Columbia. The latter is searching for capital, and the banks cited questions about the fate BBC Holdings — which Heritage had sold assets to in the hopes of future returns — in calling off the deal, along with other concerns about valuation and sufficient capital to close.

About 10 banks participated in BBC Holdings, Lowery said. Banks take a loss when they sell assets to BBC. However, the deal provides a bank a stake in BBC, which can earn it a return if the assets later sell for a profit.

Lowery is working to keep other business segments free of the Chapter 11 proceedings and other financial woes. Financial Data Technology Corp., a Franklin company that provides back-office processing to community banks, remains “very healthy,” said Mary Neil Price, a banking attorney with Dickinson Wright who is representing the company.

Citizen’s Corp. owns the company, but Price said the expectation is that the Chapter 11 filing will not affect operations. Lowery said the company has an “impeccable reputation” and is among his ventures that remain healthy.

As of this week, Lowery was fighting in bankruptcy court to keep the processing company operating as normal. In court filings, he alleges that Tennessee Commerce is improperly trying to influence control over the company — an asset that represents both a lucrative target for creditors and lifeblood for his operations.

The major players

A range of individuals and entities are embroiled in disputes over financial entrepreneur Ed Lowery’s ventures. Here’s a look at a few of the key players:

• Ed Lowery — A financial entrepreneur for decades, Lowery has built companies centered on banking and other financial services.

• Mike Sapp — Sapp is chairman, president and CEO of Tennessee Commerce Bank, a Franklin lender to which Lowery owes money. The bank’s parent, Tennessee Commerce Bancorp (Nasdaq:TNCC) is searching for investors and dealing with regulators after a $120 million third-quarter loss, and management also is working to resolve problem loans that continue to drag on the institution.

• Thomas Crocker — Crocker serves as chief risk officer for Tennessee Commerce, and, documents show, was also affiliated with BBC Holdings, one of Lowery’s companies. BBC was designed to purchase problem loans from banks and try and turn them around. An attorney for Crocker, BBC and others named in a suit by Tennessee Bank & Trust said his clients deny any wrongdoing.

• Citizen’s Corp. — The company now under Chapter 11 bankruptcy protection is the parent of Financial Data Technology Corp. Lowery and others say FDTC remains successful, and are working to maintain its operations during Citizen’s Corp.’s reorganization.